Florida AG Conducting Criminal Probe of Chinese Drywall Mess

Mar 24, 2009 | Parker Waichman LLP

Florida's Chinese drywall problem has resulted in a criminal probe. According to BradentonHerald.com, the Florida Attorney General's office has acknowledged that it is investigating whether two companies — Knauf Plasterboard Tianjian and L&W Supply Corp. — engaged in deceptive sales or marketing practices in relation to the drywall scandal.

Since January, the Florida Health Department has received more than 150 complaints about drywall that has polluted homes with a putrid, “rotten-egg” smell. Many homeowners have also complained that the fumes are causing air conditioning coils and other metals to corrode.

The drywall at the center of the complaints was made in China. Usually, drywall is manufactured in the United States, but a shortage between 2004 and 2006 prompted many builders to buy drywall from China. Most of the reported problems stem from drywall imported from China during Florida’s construction boom years of 2004-2005. Knauf Plasterboard Tianjin Co. Ltd. of China, a subsidiary of German-based manufacturer Knauf Group, is the company at the focus of Florida’s drywall problems.

Late last week, the state health department released preliminary results from tests of three samples of Chinese drywall. Those tests found that the Chinese drywall contained higher levels of sulfuric and organic compounds than an American sample tested. The report recommended further testing to determine whether the organic or sulfur compounds detected where to blame for the problems seen in Florida homes.

The three Chinese samples — including one made by Knauf — all contained traces of strontium sulfide while the American sample did not, BradentonHerald.com said. Strontium sulfide is a gray powder that emits a hydrogen sulfide, or “rotten eggs,” odor when exposed to moist air, BradentonHerald.com said.

The three Chinese samples also contained hydrogen sulfide, carbonyl sulfide, and carbon disulfide. All of these compounds are potentially toxic, and carbon disulfide in liquid form is extremely flammable. These were also found in the American sample, but could have been contaminated by the other samples as all had been shipped together, the report said.

Finally, the report said the tests found that Chinese drywall gave off a sulfur odor “when exposed to extreme heat and moisture. It is clear that exposure to moisture accelerates the release of volatiles from the drywall."

BradentonHerald.com said that the Florida Attorney General's office would not comment on its criminal probe of Knauf and L&W Supply, other than to confirm its existence. However, the chief toxicologist with the health department confirmed that he has been consulting with its Bureau of Economic Crimes.

Other agencies investigating the drywall debacle include the U.S. Consumer Product Safety Commission and the Florida Department of Agriculture and Consumer Services, BradentonHerald.com said. The Florida Department of Environmental Protection is also testing the drywall to see if it can be safely disposed in landfills.

A spokesperson for Knauf told BradentonHerald.com that it is "cooperating fully" with the Florida Attorney General's investigation.

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